PSA Group’s acquisition of GM’s European operations will make the French firm the second largest automotive company in Europe, but the deal has led to uncertainty over UK jobs.

Vauxhall’s Ellesmere Port production line

Under the €2.2bn deal, PSA – which owns Citroen and Peugeot – will acquire the Opel and Vauxhall brands, along with 12 facilities across Europe and approximately 40,000 employees. Of most significance to the UK is the acquisition of the Vauxhall, which employs around 4,500 staff across its plants in Ellesmere Port, Toddington and Luton.

Commenting on the deal, PSA Chairman Carlos Tavares sought to provide some reassurance and pledged to respect “the commitments made by GM to the Opel/Vauxhall employees.”

Meanwhile, Len McCluskey the boss of the UK’s biggest union, Unite, said he would work with Tavares to ensure that the future of the UK plants is protected. “I am determined that we can convince the new boss….that it makes sense for him to continue to build in Britain,” said McCluskey. “Our plants are the most productive in the European operation, the brand is strong here, the market for the products is here, so the cars must be made here.”

McCluskey also called on the UK government to use Wednesday’s budget to make it clear that it will invest in the sector’s future. “We need every assistance from the government to give this sector a fighting chance. That absolutely includes committing now to securing access to the single market and customs union. This is the signal that the car industry needs in order to know that the UK government values this sector.”

Meanwhile, Mike Hawes, chief executive of industry body the SMMT praised the role that government has played so far and sounded a positive note on the future of the UK operations. “We are hopeful that this deal will provide a positive future for the plants at Luton and Ellesmere Port and the wider supply chain given their inherent advantages. We have been encouraged by the active role government has played reassuring investors of its determination to safeguard our competitiveness despite the uncertainty of Brexit.”

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The possible closure of the Vauxhall plants has nothing to do with Brexit.
Foreign companies have a history of closing down operations in the UK whilst we have been in the EU (think the Peugeot factory in Ryton closed in 2007, the Ford Transit plant in Southampton closed in 2013, the Volvo plant in Ervine in 1999, various Alstom plants around the UK, etc.).
The hollowing out of UK manufacturing, which has been going on since the 1970’s has all occurred during our EEC/EC/EU membership and has more to do with Government priorities and corporate policies. The Southampton closure was particularly tragic as the replacement factory in Turkey was funded by cheap EU loans and it remains a mystery to me as to why the EU would do this.